Tackling Pa. property tax reform one more time

No one needs to convince property owners in the Pottstown tri-county area that Pennsylvania has a tax problem. They’ve been railing about it for years.

They’re not alone. And the din across southeastern and central Pennsylvania is getting louder.

Most vocal in the citizens’ outcry are the taxpayer groups that for years have been sounding the alarm that Pennsylvanians are unfairly taxed in a system that targets homeowners and is taking an increasing toll on senior citizens and those on fixed incomes.

The offender in this system is the property tax, the basic building block of education funding in Pennsylvania.

The problems inherent in the system are many, but two stand out. When school districts need to raise money, they have very few outlets to turn to. Thus they inevitably adjust property taxes, and almost always upward.

For poorer districts, the playing field quickly becomes uneven and decidedly uphill. That’s because areas with an eroding or decaying tax base do not raise nearly as much money when they raise taxes. That’s why a slight tax increase in Owen J. Roberts School District raises more money than a more substantial hike in Pottstown, where the economy has exacted a harder hit.

Homeowners know this. School officials know. So do legislators. Any number of efforts have been made to rectify what is clearly an antiquated and inequitable system. Almost all of them have failed.

Now a few more legislators are taking another shot at this vexing dilemma with the Property Tax Independence Act. It’s the brainchild of Berks County state Rep. Jim Cox, R-129th Dist., with the help of the Pennsylvania Coalition of Taxpayer Associations. Cox has dubbed his push House Bill 76, you know, as in 1776. There’s no truth to the rumor that Cox is handing out tri-cornered hats on the floor of the Legislature. He has been joined, however, by state Sen. David Argall, R-29th Dist., of Schuylkill County, with Senate Bill 76. Both bills currently reside in their respective finance committees.

The Property Tax Independence Act would not mean freedom from taxes. In fact, some levies would go up. While property taxes would disappear, residents would pay more at the cash register, as well as seeing a bigger bite from their paycheck.

The state sales tax would increase from 6 percent to 7 percent. The personal income tax also would go up, from 3.07 percent to 4.34 percent. The plan also calls for “elimination” of special-interest loopholes in both the sales and income taxes.

Ironically, while this issue has been smoldering for years, it is not one of Gov. Tom Corbett’s big three initiatives, none of them acted on by the Legislature in its spring session, but which the governor will push when pols return to Harrisburg in the fall.

We’d like to see him add tax reform as a fourth. And we’re not alone. The Property Tax Independence Act has 92 co-sponsors in the House, including 55 Republicans and 37 Democrats. Over in the Senate, 22 co-sponsors are lined up behind the measure, including 12 Republicans and 10 Democrats.

The Pennsylvania Taxpayers Cyber Coalition and Pennsylvania Coalition of Taxpayer Associations are planning the “Fill-a-Bus II” trip to Harrisburg on Sept. 24 to drum up even more support. Buses are being organized locally by the Daniel Boone Taxpayer Activists, one of 90 groups participating.

The bills need 102 votes in the House and 26 in the Senate to land on Corbett’s desk.

Not everyone believes this system will work, or even that it is a good idea. Some suggest the numbers don’t add up, that the revenue created by increasing the sales and income taxes will not replace the property tax jackpot, leaving school districts even further in the hole.

Most, however, do agree on this: The current system is broken. And unfair.

The Property Tax Independence Act will not free state residents from the burden of paying taxes. It will, however, ease the minds and pocketbooks of senior citizens and others on fixed incomes who have loyally supported the system for years, only to be brought to the point where they have nothing left to give but their homes.